BP, Shell, Statoil, Platts Raided for Price-Fixing

The European Union Commission has raided the offices of Royal Dutch Shell, Statoil and Platts over energy price-fixing concerns in an investigation that could take years to conclude.

Britain’s BP, Norway’s Statoil and Shell, which is listed in London and Amsterdam, were raided on suspicion that the oil and gas giants have attempted to manipulate energy prices by colluding to report distorted prices and to prevent other companies from submitting their prices that were not in line with this alleged collusion.

BP, Statoil and Shell submit their prices to Platts Market on Close (MOC), which then publishes the final trading prices.

At issue are prices for crude oil, biofuels and refined oil products, including gasoline, heating oil and petrochemicals.

This news led to the obvious question among consumers watching the raids and ensuing investigation closely: Has this potential price-fixing affected prices at the gas pumps? According to the EU Commission: Yes, because any small distortion affects what end consumers pay. But this goes beyond gas at the pump. Price-fixing can also inflate prices for everything from products that use gas derivatives, like cosmetics, to airline tickets.

All said and done, analysts estimate that price-fixing could have increased the average consumer’s household fuel bill by over £2,000 over the past decade.

How is the market responding to the raid? On Thursday, the London-listed oil giants were down, but not out. Shell suffered a 55p slide to 2,300.5p, while BP dipped 0.95p to 467.6p.

In London, British Prime Minister David Cameron said oil executives found guilty of price-fixing could be prosecuted under the Financial Services 2012 Act, which came into force last month.